Bank of Ireland UK fined £3.78 million for Delayed Anti-Fraud Measures

It has been reported [February 20, 2026] that in a significant enforcement action, underscoring the importance of robust anti-fraud systems in the banking sector,

• The UK's Payment Systems Regulator (PSR) has levied a substantial fine against Bank of Ireland UK (BOIUK).
• The penalty, amounting to £3,779,300, stems from the bank's failure to implement mandatory name-checking protocols known as Confirmation of Payee (CoP)  within the stipulated timeframe.
• This delay not only breached regulatory requirements but also exposed millions of transactions to potential risks.

The Breach and Its Details

• The PSR's Specific Direction 17 (SD17), which came into effect in October 2022, mandated that major payment service providers, including BOIUK as a Group 1 provider, must have CoP systems in place by October 31, 2023.
• CoP is a critical safeguard that verifies the payee's name matches the account details before a transfer is processed, helping to prevent authorised push payment (APP) scams and misdirected funds.
• However, BOIUK was 14 months late in deploying the system to send CoP requests.
• As a result, over 1.14 million new payees went unchecked, involving transactions totalling approximately £6.9 billion. This oversight left customers vulnerable to fraud at a time when digital payments are increasingly prevalent, and cyber threats are on the rise.
• The PSR initiated an investigation in July 2024, and BOIUK opted for an early settlement, which reduced the fine by 30% from an original £5.4 million.
• Notably, BOIUK was the last among Group 1 providers to achieve compliance, highlighting a lag in its operational readiness despite ample preparation time provided by the regulator.

Regulatory Perspective and Industry Implications

• David Geale, Managing Director at the PSR, emphasised the role of CoP in building consumer confidence:
• “Confirmation of Payee is a vital tool to combat fraud and misdirected payments, giving people confidence that their money is going exactly where they intend. Bank of Ireland UK had plenty of time to put the system in place, missing the deadline by more than a year, putting its customers at increased risk of fraud.” He added that the PSR will continue to enforce compliance to protect users.
• This fine serves as a stark reminder of the high stakes involved in regulatory compliance within the financial services industry.
• It aligns with broader efforts to strengthen anti-money laundering (AML) frameworks and transaction integrity, especially as APP fraud continues to plague the sector. Other reports have echoed the PSR's concerns, noting that the delay compromised safeguards for billions in payments.
• Industry experts suggest this could prompt other banks to review their compliance timelines more rigorously, potentially accelerating the adoption of advanced fraud detection technologies.
• For consumers, it reinforces the need to remain vigilant when making online transfers, even as regulators push for systemic improvements.

Looking Ahead

• As the financial landscape evolves with faster payments and digital innovations, regulators like the PSR are likely to impose stricter penalties for non-compliance to deter similar lapses. BOIUK's case may set a precedent, encouraging proactive investment in security infrastructure to avoid both financial repercussions and reputational damage.
• This development highlights the ongoing battle against financial fraud in the UK, where the timely implementation of protective measures is not just a regulatory obligation but a cornerstone of trust in the banking system.

Sources

1. Bank of Ireland UK fined for late security system implementation - Computer Weekly
2. Bank of Ireland UK fined after introducing anti-fraud tool a year late - Morningstar.
3. LATEST: Bank of Ireland UK fined £3.78m for missing anti-fraud deadline - AML Intelligence
4. Bank of Ireland UK fined over delayed fraud-check system - Mortgage Introducer.
5. Bank of Ireland UK fined £3.7mn for confirmation of payee failures - The Banker
6. Bank of Ireland UK fined £3.7m after introducing anti-fraud tool a year late - Evening Standard.
7. Bank of Ireland UK is fined £3.78m for failing to implement anti-fraud measures in time - Irish Independent.
8. Bank of Ireland's UK arm hit with £3.8m fine for fraud failures - City A.M.
9. Bank of Ireland UK fined £3.7m after introducing anti-fraud tool a year late - Belfast Telegraph.
10. Bank of Ireland's UK arm fined £3.7 million by regulator - Business Post
11. PSR fines Bank of Ireland UK over £3.7m for failing to implement Confirmation of Payee - Payment Systems Regulator (Official)